If you are currently enrolled in Medicare, the status quo can be your worst enemy.
About 95% of Medicare beneficiaries stick with the coverage that they already have. This, however, is not a smart approach because the prices and offerings can change annually.
Luckily, Americans have an opportunity to switch policies every year during the open enrollment period, which will last through Dec. 7. Here are five things you should know about your Medicare choices while you still have a chance to make changes:
There are two main types of Medicare. Seventy percent of eligible Americans are enrolled in the Original Medicare, which is the default choice.
The Original Medicare is a traditional fee-for-service through the federal government and it covers hospital insurance (Medicare Part A) and medical insurance (Medicare Part B) that pays for such things as doctors’ fees, outpatient hospital services and some home health services. With this plan, you can seek help from any doctor or hospital in the country and the government pays the providers directly.
If you choose Original Medicare, you’ll want to consider obtaining a Medigap policy that’s designed to bridge the gap between what Medicare pays and your out-of-pocket expenses. You can learn more about Medigap policies on this federal site.
The second type of Medicare, Medicare Advantage is a health insurance program of managed health care and health maintenance organizations, such as Kaiser Permanente and Health Net, that serves as a substitute for Original Medicare. You will often need to get a referral to see specialist physicians that are in the plan’s network. Most Medicare Advantage plans cover drug costs.
The Original Medicare does not offer a drug benefit so if you want drug prescription coverage you’ll have to select a Medicare Part D plan from a private insurer. In 2015, there will be more than 1,000 prescription drug plans offered nationwide and Medicare recipients will typically have an average of 30 plans to choose from.
Plans change and it’s important to understand how they may impact you because you may wish to switch policies for better coverage and prices. For instance, prescription drug plans can make changes to their lineup of medications (called a formulary) every year so you’ll want to check that yours are covered.
It’s been estimated that roughly 70% of Medicare D drug plan members will see their premiums rise for 2015 if they stay with their current policy. Most seniors, however, stick with the status quo. According to an analysis by researchers at Georgetown, University of Chicago and the Kaiser Family Foundation, only 13% of enrollees voluntarily switched plans between 2006 and 2010.
It can be bewildering choosing Medicare plans. Resources, however, exist to help. For starters, you can download the2015 Medicare & You handbook, which is 152 pages.
In addition, the Medicare Plan Finder allows consumer to compare deductible, co-pays and premiums of each plan, as well as the rating each plan received under Medicare’s Five-Star Rating system. The finder allows you to conduct general search for plans, as well as a more personalized search.
You can also contact Medicare representatives by calling (800) MEDICARE.